CIT Bondholders Agree To $3 Billion Emergency Loan
STEVE INSKEEP, host:
NPR's business news starts with a financial rescue.
(Soundbite of music)
INSKEEP: This time the U.S. government is not involved. In fact, the government refused to bail out CIT. That's the financial firm that's a big lender to small and medium-sized businesses. CIT was headed for bankruptcy. But last night its bondholders reportedly agreed to give the a three billion dollar emergency loan. The loan comes with a hefty interest rate of 10-and-a-half percent. Not a bad deal for the bondholders, assuming CIT manages to pay it back. And while the loan buys CIT some time, it does not solve the company's problems. It still has to restructure its business and dig itself out from under all the subprime mortgage loans and other risky investments it made during the housing boom.
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